Auto retail giant AutoNation Inc. is expanding its service agreement with Waymo in a two-year extension that now also will include delivering parts using autonomous vehicles in the Phoenix area.
AutoNation, which made the announcement Tuesday as it released third-quarter results that dipped from a year ago, said the parts delivery initiative will begin in the coming months at its AutoNation Toyota Tempe dealership in Arizona.
"AutoNation Toyota Tempe delivers a lot of Toyota parts to other businesses, right, so independents and other repair shops in Phoenix," AutoNation CEO Cheryl Miller told Automotive News. "And so now we will be delivering those Toyota parts in these [autonomous Waymo] vehicles instead of sending a person to deliver them in another vehicle."
The nation's largest new-vehicle retailer and Waymo initially announced their partnership in November 2017. AutoNation first focused on servicing Waymo's self-driving vehicles, sending technicians to service and maintain Waymo's Chrysler Pacifica hybrid minivans. The tie-up had already expanded in scope for AutoNation, which last year began offering customers Waymo rides from its Toyota Tempe store.
Now staff at that store soon will be able to request a Waymo Pacifica hybrid through an app. The vehicle will arrive and a staffer will put the box of parts in the Waymo and start the ride. "We'll be able to deliver parts that fit safely and securely into those vehicles to customers on demand," Miller said.
The expansion with Waymo came as AutoNation's third-quarter earnings were hit by one-time severance costs for its former CEO and on lower gains from dealership and property sales.
Net income from continuing operations fell 11 percent to $100 million. Net income was dinged by $10 million related to the severance agreement with former CEO Carl Liebert, which AutoNation disclosed in August. AutoNation then said the after-tax hit would range from $10 million to $11 million. AutoNation in July announced Liebert had stepped down as CEO after just four months with the retailer. The company named former CFO Miller as CEO.
The quarter also included $4 million in gains from store and property divestitures, compared to $13 million in gains a year ago.
Revenue grew by 2.1 percent to $5.46 billion. While new-vehicle revenue slipped 2 percent, used-vehicle, finance and insurance and parts and service revenue all posted gains. AutoNation saw income gains from its domestic, import and premium business segments. Same-store revenue grew 3.4 percent, same-store gross profit jumped 5 percent and same-store parts and service gross profit rose 5.9 percent.
AutoNation shares dropped 2.2 percent to close at $50.67 on Tuesday.
Records: All-time quarterly same-store F&I gross profit per vehicle of $1,939.
Sales: New-vehicle sales fell 6.4 percent to 74,190. Third-quarter new light-vehicle sales across the nation were flat, according to the Automotive News Data Center. Used-vehicle sales gained 5.2 percent to 63,581.
Same-store sales: New-vehicle sales on a same-store basis dropped 4.6 percent to 73,271 and used-vehicle sales on a same-store basis increased 7.3 percent to 62,708.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 310,839 new vehicles in 2018. It retailed 237,722 used vehicles for the same period, ranking it No. 3 on Automotive News' list of the top 100 dealership groups in used-vehicle sales.
